Biotech Stock Mailbag: Biotech Bull So Insanely Good It Will Make You Forget Week's Pain

BOSTON (TheStreet) -- It's been a painful week for most health care investors, so let's lighten the mood. This week's Biotech Stock Mailbag kicks off with biotech bull laid on so thick you can't help but laugh and applaud.

CMartin65 emails to ask, "You were right about Ampio Pharmaceuticals (AMPE). I wish I listened to you sooner. Is there any reason to believe the situation improves over time?"

Thanks, but sorry you got hurt in the Ampio blowup. The stock collapsed (again) on the failure (again) of the company's experimental osteoarthritis drug. This time, Ampio blamed negative study results on placebo patients reporting greater knee pain relief than expected. The previous knee-pain study imploded because Ampion was allegedly inactivated because the drug froze during shipment.

You picking up the pattern here?

Ampio held a conference call on April 23 to reassure investors that all was well with Ampion. The knee-pain study was actually successful when Ampion-treated patients were compared against themselves, the company claims. Hmmm ...

An expected Food and Drug Administration approval filing for Ampio by the end of the first quarter didn't happen. Now, the company says it will meet with the FDA "as soon as practical" to determine next steps for Ampion. Good luck with that, guys.

The best part of last week's Ampio conference call came when Vaughn Clift, the company's chief regulatory affairs officer, responded to a retail investor asking for an update on Optina, the company's diabetic macular edema drug. A study of Optina was completed last November, but Ampio still hasn't disclosed results. In February, Ampio said it didn't have time to analyze the Optina study because it was too busy with Ampion.

Here's what Clift said about Optina last week. Clift's run-on remark really must be read verbatim to appreciate his ability to spew class-A, Hall of Fame-worthy bull.

"Optina is very important to us and to be honest, personally, as a diabetologist, it would be wonderful if we had a tablet with no side effects that could be used for these patients. But the problem with Optina is that it is a much, much more complicated study for us to analyze than Ampion, our number one priority.

"Optina was a lesser priority. However, we have assigned a specific individual on staff to champion this analysis. It's important to know that unlike many drugs, we need to understand the blood level that the back of the eye was exposed to. To do so, we need to analyze blood samples for the patients and to do that we had to find a lab and create a validated assay. That is still ongoing.

"Once that's done we will analyze several thousand samples, and unfortunately, that's not the end of the analysis. We then have to correct for the presence of hormones and proteins in the blood before we can accurately understand how much [Optina] was being exposed to the back of the eye. Then we can begin the process of looking at the effect [Optina] has had on our patients, with the present belief that we are going to show a range which is effective. We will report that but this is going to take months."

Slow. Clap.

Funny thing, the Optina study design is actually quite simple. Diabetic macular edema patients are treated with Optina or a placebo. After 12 weeks, an eye test is administered to see whether Optina improves vision over placebo.

You asked whether there was any reason to believe Ampio's outlook might improve over time. No, there is not.